Malawi Government representatives have kept a tight lid on the details of a 10-month government-to-government (G2G) fuel procurement deal with Kenya, which will see National Oil Company of Malawi (Nocma) Limited as the official agent.
In an interview yesterday, Minister of Energy Ibrahim Matola declined to outline measures put in place to ensure transparency and accountability in the fuel procurement process.
The minister further refused to explain how the arrangement would affect the timeline for direct importation from Gulf oil-producing countries as earlier indicated by President Lazarus Chakwera.
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In a brief WhatsApp response, Nocma spokesperson Raymond Likambale redirected enquiries to the Ministry of Energy, saying: “Nocma is an agent appointed by the ministry. The ministry is the political holder.”
Under the arrangement, Nocma would be importing diesel and petrol under a 10-month G2G agreement with Kenya. However, details such as the Kenyan entity involved remain undisclosed.
In a letter dated February 11 2025, Matola invoked Section 6A (2) of the amended Liquid Fuels and Gas (Production and Supply) Act, 2025 authorising Nocma to execute the deal from March to December 2025.
The arrangement, the minister stated, aims to alleviate the country’s fuel crisis and buy time to establish direct imports from Gulf oil producers.
Reads the letter addressed to Nocma board chairperson Colleen Zamba: “To remedy the current fuel crisis and finalise processes for direct Gulf imports, Nocma is authorised to procure fuel through a G2G fuel supply arrangement with Kenya.”
Malawi Energy Regulatory Authority (Mera) chief executive officer Henry Kachaje explained that at this point neither Matola nor Nocma officials have communicated the development to the regulator.
However, he pointed out that Nocma’s nomination as a government agent is in line with the law.
Meanwhile, Petroleum Importers Limited (PIL) general manager Martin Msimuko has warned that forex shortages threaten fuel stability ahead of the tobacco season.
“We are operating at 70 percent of the 20 million litres monthly target. We are not sure about the upcoming tobacco season, it is still hazy as forex may already have been committed,” he said.
In a separate interview, former Energy minister Grain Malunga indicated that the economic impact of the G2G arrangement is that the overhead costs of bringing fuel into the country can be monitored and controlled to influence pump price.
Last month, the World Bank said international experience has shown that G-2-G procurement arrangements for commodities such as fuel can lock the government into paying fixed prices “significantly” above the global price.
Under the arrangement the President announced in a national address in November last year, Nocma will be backed by flexible six-month letters of credit, giving it up to 180 days to pay suppliers.
